Finally a Rally for Stocks!
Mar 11, 2009
Posted by Jody Eisenman | Filed under Uncategorized
After a series of horrendous declines in the market since the beginning of this year, the stock staged an impressive rally led by (surprise!) the financials. The Dow rocketed out of the gate, never really sold off much during the day, and closed up almost 380 points. Virtually every beaten up financial had a strong day, led by C (up over 40%!), Wells Fargo, JP Morgan and Morgan Stanley. I believe we have seen at least temporary lows for the market, which has been extremely oversold. I do believe this rally has legs, and I think we can possibly hit 800 on the S and P 500, which closed yesterday up at 719.60, up over 40 points, or about 6%. The rally began on Pandits’ comments that C has been profitable for the first 2 months of the year. I think it will continue because so many people have been short, and now they will probably cover. There is no rally like a short covering, where you see almost panic buying.
Despite the rally, one must still note that the very real problems in the US economy continue to exist. Therefore, I still believe that we are in a bear market for stocks, especially since the short term bond markets are actually deteriorating. If you are long, enjoy this while it lasts, but be prepared to put in stops in case we run out of steam.
